Judge: Robert C. Longstreth, Case: 37-2020-00022480-CU-FR-CTL, Date: 2024-04-05 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - March 12, 2024

03/15/2024  08:30:00 AM  C-65 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Robert Longstreth

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Civil - Unlimited  Fraud Summary Judgment / Summary Adjudication (Civil) 37-2020-00022480-CU-FR-CTL JARVIS VS O'CONNOR [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 12/28/2023

Defendants Brendan O'Connor and RJS Law's Motion for Summary Judgment (ROA 199) is DENIED.

Plaintiff's Complaint asserts causes of action against both Defendants for 1) Fraud/Intentional Misrepresentation, 2) Negligent Misrepresentation, 3) Professional Negligence, 4) Breach of Fiduciary Duty, and 5) Constructive Fraud.

Defendants seek summary judgment; they have not requested summary adjudication of any individual cause of action. Thus, in order for the court to grant their motion, Defendants must demonstrate summary judgment of Plaintiff's entire Complaint is appropriate. (See Homestead Savings v. Superior Court (1986) 179 Cal.App.3d 494, 498.) Defendants acknowledge this in confirming that they are relying on 'the contractual indemnity and hold harmless agreement which insulates Defendants from liability to Plaintiff under any theory.' (Reply Br., ROA 227, at 4:11-12, emphasis in original.) Defendants assert they are entitled to summary judgment because Plaintiff expressly agreed to indemnify and hold harmless Defendants from any and all claims 'that arise out of, relate to, or result from any act or omission of Borrower's Attorney.' (Def. SSUF ¶¶ 21, 27, 33, 37.) At a minimum, however, Defendants cannot be held harmless and/or indemnified from their own intentional wrongs.

(Civ. Code § 1668.) Given that Plaintiff alleges multiple claims for fraud, summary judgment is clearly not appropriate.

In their reply, Defendants assert section 1668 of the Civil Code is inapplicable to indemnity agreements, citing Lemat Corp. v. Amer. Basketball Assn. (1975) 51 Cal.App.3d 267. The court in Lemat Corp. held '[s]ection 1668 is not applicable to indemnity agreements.' (Lemat at p. 278.) However, Lemat Corp.

also acknowledged '[t]he distinction between an exemption (§ 1668) whereby a person seeks to avoid liability to a victim who has suffered due to that same person's unlawful conduct and an indemnity has been recognized by the courts.' (Id. at p. 278.) Thus, while the parties may contract that Plaintiff is to indemnify from third party claims resulting from Defendants' acts or omissions, the parties may not contract to require Plaintiff to indemnify Defendants for Defendants' own first-party fraud or other intentional wrongful conduct perpetuated directly against Plaintiff. The cases cited by Defendants as to whether indemnification clauses can in certain circumstances be construed to cover direct claims as well as third party claims do not address section 1668, and do not purport to hold that an indemnitee can exempt itself from liability for fraud, willful injury, or negligent violations of law.

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3041934 CASE NUMBER: CASE TITLE:  JARVIS VS O'CONNOR [IMAGED]  37-2020-00022480-CU-FR-CTL Defendants may not rely on the indemnity provisions to exculpate themselves from liability for fraudulent acts committed against Plaintiff. Although Defendants attempt to argue their clients Commercial Exchange Solution, Inc. ('CES') and Susan Werth are the real wrongdoers, there are clearly disputed issues of material fact that preclude summary judgment, given Plaintiff's assertions that O'Connor made false representations to him. (Pltf. Addl. Facts ¶¶ 3-5.) Moreover, the court is not persuaded the clauses even purport to provide indemnity for fraud, or any other kinds of intentional wrongdoing, committed against Plaintiff by Defendants. In order to be enforceable, the language of an indemnity agreement must be 'sufficiently specific to alert the potential indemnitor to the full scope of its obligation.' (Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012, 1033.) At a minimum, even if exemption from fraud and willful misconduct were legally permissible, the clauses at issue here are not sufficiently specific to put Plaintiff on notice that Plaintiff is required to indemnify Defendants for their own willful misconduct committed directly against Plaintiff.

Defendants also make an argument that is not based on the indemnification, asserting that they owed no duty to Plaintiff because Plaintiff was not Defendants' client. At a minimum, Defendants cannot obtain summary judgment because this argument would not absolve Defendants from Plaintiffs' allegations of fraud. Regardless of whether any attorney-client relationship existed, Defendants are not permitted to make knowingly false statements to Plaintiff with the intent to induce Plaintiff's reliance on such statements. (Civ. Code § 1710.) Moreover, as Plaintiff points out in his opposition, Defendants' motion fails to address Plaintiff's assertions of O'Connor's duties and obligations under the Collateral Account Agreements, to which O'Connor was a signatory.

Defendants' evidentiary objection nos. 1-33 to Plaintiff's declaration are overruled. (Code Civ. Proc. § 437c(q).) Once confirmed, this ruling shall be the final ruling of the court and no further written order is required.

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